In re IMS Proschool Pvt. Ltd. (GST AAAR Maharashtra)
The Appellate Authority for Advance Ruling upheld the ruling given by the Advance Ruling Authority by observing that since they are not providing any services in relation to the NSDC programme implemented by the NSDC, they are not eligible for the exemption provided in the entry 69 of the Notification No. 12/2017-C.T. (Rate) dated 28.06.2017.
NSDC is implementing certain programmes which are specific and identified. The appellant has stated that the NSDC has not announced specifically any course/programme which would be considered as a part of the National Skill Development programme implemented by NSDC. But the Annual Report is very clear. The NSDC does implement programmes independently which is very clear from the NSDC website as well as from the Annual report and it is a prime implementing agency for such programmes which come through the Ministry of Skill Development and Entrepreneurship (MSDE). The main schemes and programmes that would be covered under the National Skill Development Programmes would be PMKVY, Sankalp, Udaan, STAR, Polytechnic Schemes, Vocationalisation of education run by the Ministry of Skill Development and Entrepreneurship and similar other skill development schemes that are run by the various ministries or departments or their directorates. If the services in relation are provided by training partners in relation to the schemes as mentioned above through the partners approved by NSDC, then only the benefit of Notification as claimed would be applicable and it would not be applicable in respect of other services relating to skill development provided by the appellant.
The appellant has also contended that a broad meaning should be given to the expression ‘in relation to’ as occurring in Entry no 69 of the Notification. Even if a broader meaning is given to the term ‘in relation to’, it cannot be denied that the training has to be in relation to a National Skill Development Programme implemented by NSDC as also any scheme implemented by NSDC. We have already interpreted as to what is meant by the above expressions and how restrictive is the scope of the expressions. It is agreed that any training coming under the schemes mentioned above, even if are in relation to such schemes will be covered by the Entry but if the training itself is outside the scope of expressions (i) and (iii) of the Entry no 69 , then nothing fruitful can be achieved by giving a broad expression to the term ‘in relation to’.
Read AAR Order- GST on educational courses approved by National Skill Development Corporation
FULL TEXT OF ORDER OF APPELLATE AUTHORITY OF ADVANCE RULING, MAHARASHTRA
At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisions under the MGST Act.
The present appeal has been filed under Section 100 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as “the CGST Act and MGST Act”] by IMS PROSCHOOL PVT. LTD(herein after referred to as the “Appellant”) against the Advance Ruling No. GST-ARA-37/2017-18/B-44 dtd. 05.06.2018.
BRIEF FACTS OF THE CASE
A. IMS Proschool Pvt Ltd. (herein after referred to as ‘Appellant’) is a company incorporated under the Companies Act, 1956 having its registered office at Mumbai, Maharashtra.
B. The Appellant is an initiative of IMS Learning Resources and offers educational training and skilling courses through classroom training and virtual coaching, in many areas such as data science, digital marketing, IFRS, ACCA, Fitter – Mechanical Assembly, Basic Electrical, Sales Person Retail etc. across many cities in India including Mumbai, Pune, Chennai, Bangalore, Delhi, Hyderabad, Gurgaon, Kochi and several districts of Gujarat.
C. The Appellant has obtained registration under Goods and Service Tax (hereinafter referred to as ‘GST’) regime in states of Maharashtra, Haryana, New Delhi, Karnataka, Kerala, Tamil Nadu, Telangana and Gujarat.
D. Appellant is engaged in the business of skilling the youth with the objective of helping them find decent job, make them employable and to help them earn better living. This includes preparing graduates and working professionals to appear for various National and International certifications for career development needs, including NCFM Financial Modelling, Financial Analysis, Management Accounting, Business Analytics and various other post graduate programs in areas of finance, business analytics and marketing as well as technical programs such as Fitter, Basic Electrical and Sales Person Retail.
E. For imparting the aforesaid training, Appellant has developed its own proprietary training formats, materials and methodology, which are conducted at its centers located in various cities and sometimes at location of business institutions and Govt, organizations. The clientele of the Appellant includes individuals, corporates, educational institutions, Govt, organizations.
F. The Appellant has tie-ups with various educational institutes / Govt, organizations, including National Skill Development Corporation (herein referred to as ‘NSDC’), National Stock Exchange Academy, Symbiosis International University, Indira Institute of Management, Lovely Professional University, Chartered Financial Institute, Chartered Institute of Management Accountant.
G. NSDC is a not-for-profit public limited company incorporated under Section 25 of the Companies Act, 1956 (corresponding to section 8 of the Companies Act, 2013). NSDC was set up as part of a national skill development mission of Government of India to fulfill the growing need of skilled manpower across sectors in India and narrow the existing gap between the demand and supply of skills. NSDC was set up by Ministry of Finance as Public Private Partnership (PPP) model.
H. Appellant is an approved training partner of NSDC and till date, 12 educational courses offered by it have been approved by NSDC. Further, 2 educational courses for which Qualification Packs (herein referred to as ‘QP’)/ National Occupational Standards (herein referred to as ‘NOS’) have not been defined by NSDC yet, have been conditionally approved by NSDC. All such courses offered by the Appellant are directed towards skill development and to help increase skilled employment in India.
I. The technical and vocational educational courses offered by the Appellant are either funded by NSDC/ Central Government/ State Government or are paid up courses which are enrolled by individuals, corporate.
J. With advent of GST, there are various services which are exempt under the new indirect tax regime vide Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017. Relevant to current context, Appellant would like to reproduce Entry No. 69 in the said notification as under:
Any services provided by,-
(a) the Notional Skill Development Corporation set up by the Government of India;
(b) a Sector Skill Council approved by the National Skill Development Corporation;
(c) an assessment agency approved by the Sector Skill Council or the National Skill Development Corporation;
(d) a training partner approved by the National Skill Development Corporation or the Sector Skill Council, in relation to-
(i) the National Skill Development Programme implemented by the National Skill Development Corporation; or
(ii) a vocational skill development course under the National Skill Certification and Monetary Reward Scheme; or
(iii) any other Scheme implemented by the National Skill Development Corporation.
K. Appellant believed that the activities performed in relation to the courses approved by National Skill Development Corporation is eligible for exemption under the above entry. However, there were certain doubts with respect to eligibility of exemption in following situations:-
a. The said courses are offered to corporate and business institutions
b. The approved courses are imparted by business partners of Appellant as subcontractor
c. For certain courses QP/ NOS are not defined by NSDC but exceptional approval is given. These are subsequently defined and eventually approved by NSDC
d. For certain courses QP/NOS are subsequently upgraded by way of adding more topics/ content. These modifications are not yet approved by NSDC
L. Therefore, to seek clarification regarding the above doubts, Appellant had approached the Maharashtra Authority for Advance Ruling (herein after referred to as ‘ARA’) under Section 97 of Central Goods and Services Tax Act, 2017 (herein referred to as ‘CGST’) and State Goods and Services Tax Act, 2017 (herein referred to as ‘SGST’).The application had sought for the clarifications on the following questions of law:
Q.1. Whether educational courses offered by the Applicant, which have been approved by NSDC, would be construed as in relation to National Skill Development Programme implemented by NSDC?
Q.2. The Applicant offers certain educational courses for which qualification standards / framework i.e. QP/ NOS have not been defined by NSDC and will be approved by NSDC as and when the relevant QP/ NOS would be defined by NSDC. In the interim period, NSDC has given exceptional approval on such courses. Till the time QP/ NOS are defined for such educational courses and are eventually approved by NSDC, whether such courses will be treated as in relation to National Skill Development Programme implemented by NSDC?
Q.3. In certain situations, NSDC approved educational courses are subsequently upgraded by the Applicant within pre-defined QP/ NOS framework, by way of adding more topics/ contents /modules. However, such modified version of NSDC approved educational courses have not been approved by NSDC yet. Whether such modified version will be treated as in relation to National Skill Development Programme implemented by NSDC?
Q.4. If the answer to Q.1, Q.2 and Q.3 is Yes, then whether the benefit of GST exemption as per Notification No. 12/2017- Central Tax (Rate), dated the 28th June 2017 would be available to the Applicant?
Q.5. If answer to Q.4 is yes, whether benefit of GST exemption as per Notification No. 12/2017- Central Tax (Rate), dated the 28th June 2017 would be still available if such educational courses are offered to corporate and business institutions?
Q.6. Whether the NSDC approved educational courses which are actually imparted by the business partners of the Applicant, on behalf of the Applicant as sub-contractor of Applicant, at various centres located across the country, will be considered as offered by the Applicant?
Q.7. If answer to Q.6 is Yes, whether benefit of GST exemption as per Notification No. 12/2017- Central Tax (Rate), dated the 28th June 2017 would be available to the Applicant?
M. The concerned jurisdictional officer had submitted contention against the ruling sought by Appellant. The said submissions against each of the above questions are summarized in the following table:
